On the evening of October 25, Evergrande and FF successively stated that the Hong Kong International Arbitration Center has ruled on the emergency relief arbitration of FF application. In this regard, some insiders pointed out that emergency arbitration is a temporary relief before formal arbitration. The purpose of the measures is to maintain the company's current situation. It is a phased result and has limited impact on both parties. Since FF will continue to arbitrate for the deprivation of Evergrande financing consent, the final arbitration result will take some time to know.
FF said that it had a decisive victory in the application for emergency relief for Evergrande Health submitted by the Hong Kong International Arbitration Centre. The arbitrator ruled that Evergrande could no longer prevent FF from obtaining funds from other financing sources.
However, as can be seen from the news released by Evergrande, Jia Yueting has only obtained an opportunity to temporarily solve the financial pressure. The conditions for refinancing are quite strict. In the short term, Evergrande will remain the largest shareholder of FF.
Evergrande Health’s announcement stated that the Hong Kong International Arbitration Center rejected Jia Yueting’s request for a complete deprivation of Evergrande’s financing consent and rejected Jia Yueting’s new request to further deprive Evergrande’s asset mortgage. As a temporary relief measure, In order to support Smart King's business development and protect the common interests of shareholders, the arbitrators agree that Smart King will conduct strict financing, in which the valuation of new stock financing shall not be lower than the valuation of Shiying's investment, and Shiying shall enjoy the right of first refusal of new shares. And the amount of external financing before the final arbitration shall not exceed 500 million US dollars.
Compared with the previous investment of Evergrande's $2 billion, $500 million does not affect Evergrande's position as the largest shareholder of FF. At the same time, Evergrande also has the right of first refusal to purchase new shares.
In addition, it is reported that Jia Yueting previously said in his internal mail that FF has negotiated with the new financier, and the new financing parties involved include Sequoia Capital and a Middle East fund. But Jia Yueting and the two new financing parties to be introduced It is not smooth. In this regard, neither FF nor Evergrande responded.
It is reported that in June this year, Evergrande Health announced that it announced that it will acquire a 100% stake in Hong Kong Shiying Company for HK$6.746 billion, thereby obtaining a 45% stake in Smart King Company owned by the company and becoming the largest shareholder of Smart King. Smart King Capital holds the core assets of FF.
On October 7, Evergrande Health announced in a notice that Jia Yueting had exhausted Evergrande's early payment of 800 million US dollars for half a year, and proposed to JD to pay 700 million US dollars in advance. In order to maximize the support of Smart King's development, it signed with Jia Yueting. A supplementary agreement, agreeing to pay 700 million US dollars in advance if the payment terms are met, 'Jia Yueting uses his rights in the majority of the joint venture company to control the joint venture company, and requires the Evergrande payment if the contract payment is not met. It was used as an excuse to arbitrate at the Hong Kong International Arbitration Center on October 3, 2018, requesting that the consent of Evergrande as a shareholder to the relevant financing be dismissed and all agreements should be lifted.
The FF said, 'In addition to the first investment of 800 million US dollars, Evergrande failed to fulfill the promise of paying any additional funds to FF, but tried to gain control and ownership of all IPs of FF China and FF.'
Therefore, whether the FF satisfies the supplementary agreement is obviously the key to the development of the situation. However, since the additional agreement is a trade secret, neither party can disclose the specific content. Both parties also indicated that they must wait for the arbitration result of the Hong Kong International Arbitration Centre. All the arbitrations and other arbitration contents of Evergrande will take several months. 'The above-mentioned industry insiders said.